All posts tagged euro

David Cameron’s push for a referendum on his country’s membership in the European Union, and his demand for powers back from Brussels to persuade U.K. voters to stay in the EU, has its fans.

Vince Cable, his business secretary, is not among them.

Mr. Cable, a leading figure in the Liberal Democrats, the British government’s junior coalition partner, was in Brussels Tuesday speaking at the Lisbon Council think tank about the EU. Long known for his pro-European views, Mr. Cable sent Mr. Cameron a warning: raising expectations of major changes in EU rules to satisfy British demands was a dangerous gambit.

“There are a few issues where Britain, Germany, other major countries have a common view, and I’m sure changes can be obtained,” he said. “But anybody who is expecting that our relationship with Europe can be fundamentally renegotiated is just utterly unrealistic.” Read More »

Since the start of the eurozone crisis, European politicians have periodically volunteered the European Investment Bank and the European Union budget as sources of funds that could be used to stimulate the bloc’s floundering economy. Then it turns out the EIB doesn’t want to get involved (see update below), and there isn’t much spare cash left in the EU budget. The ideas die a quiet death, and politicians hope few people remember they were alive in the first place.

Unemployment is too high and growth is subdued, but at least the euro zone is on the road to recovery. That’s been the refrain from euro-zone officials over the last six months, ever since it became clear the 18-nation economy had stopped contracting last year.

But is the recovery actually underway? Or has the euro-zone economy merely settled on a small ledge, ready to start falling again at the slightest gust from outside forces?

The Centre for Economic Policy Research, a London-based think tank, says that growth has been too feeble over the last year to call what’s been happening a recoveryRead More »

It’s the week of Christmas and Brussels’ European district is deathly quiet this sunny Monday morning. European Union institutions are closed and won’t reopen until Friday, Jan. 3.

On New Year’s Day–when Slovakia incidentally also marks the founding of its republic in 1993–the Greek presidency of the EU begins for six months. On this day too, Latvia is due to adopt the euro, becoming the euro zone’s 18th member.

Instead, the experts—including lawyer Lee Buchheit, academic Mitu Gulati and former IMF deputy managing director Anne Krueger– advocate gentler treatment of private-sector creditors. To buy time for a country receiving a bailout, they argue existing debt holders should be compelled to extend debt maturities by three to five years. Read More »

What does rebalancing mean? During the first 10 years years of the euro zone, wages and prices rose more quickly in Greece, Portugal, Spain and Ireland – the euro-zone periphery – than they did in the core of the euro zone, mainly Germany. Call that the “unbalancing,” which resulted in a sharp loss of economic competiveness in southern Europe and Ireland. Multi-billion bailouts followed soon after.

Now, economists agree, there needs to be a rebalancing: wages and prices in the core of the euro zone must rise faster than they do in the periphery. That should restore the competitiveness of the periphery, boosting their export sectors and ultimately helping create jobs.

The first full week of May will be intense in Brussels, as discussions in the European Parliament will ensure a steady news flow about the economic situation in Europe. But it will also be short: Thursday is Europe Day.

The week will start with a visit by Irish Prime Minister Enda Kenny to Jose Manuel Barroso, president of the European Commission, on Monday. On the same day, another EU VIP–Herman Van Rompuy, president of the European Council–will be in Denmark, meeting the country’s prime minister, Helle Thorning-Schmidt.

Tuesday is the big day: the Commission organizes a conference on the euro with many newsmakers. At the same time, Olli Rehn, EU commissioner for economic affairs, will speak to the budget committee of the European Parliament, while Jeroen Dijsselbloem, the president of the Eurogroup (the euro-zone finance ministers), addresses the economic affairs committee. Meanwhile, Mr. Van Rompuy will visit Sweden and then Finland, meeting those countries’ prime ministers.

On Wednesday Mr. Rehn will be again in Parliament, this time speaking to the economic affairs committee, together with Jorg Asmussen, executive member of the European Central Bank.

The work week will virtually come to an end Wednesday to leave space for the celebration of Europe Day on Thursday. On May 9, 1950, French Foreign Affairs Minister Robert Schuman made a speech proposing the creation of a European Coal and Steel Community, allowing its members –primarily France and Germany, just five years after fighting each other– to pool their coal and steel production. Since then, the speech has been seen as the beginning of the European adventure. Read More »

Talks between the European Parliament and member states on giving the European Central Bank new powers to police euro-zone banks are moving like molasses through the EU’s legislative machinery, meaning a March kick-off date for the bank watchdog could be missed.

“The timetable is sliding because negotiations are going on in a rather slow process,” said Sven Giegold of the Green Party, who’s in charge of one of the files linked to the banking supervisor. “It’s clear that we will not have an agreement before the end of January.”

Coming to an agreement in the Council had already been difficult. The 17 euro states were at odds on many of the key issues, such as what banks should be supervised directly by the ECB, and they also had to accommodate non-euro states that may want to join the new regime as well as the U.K., which had no interest in signing up but feared that it could be outvoted on other banking matters. (A summary of the finance ministers’ deal sealed just before the holidays can be found here.) Read More »

Attention unknown politicians of Europe: Brush up on your European affairs, because you could suddenly be plucked from relative obscurity and given one of the bloc’s most high-profile jobs.

Thanks to the idiosyncrasies of European politics, several top jobs in recent years have been handed to politicians who were unknown outside, and sometimes inside, their own countries. The latest example is likely to be the new Dutch finance minister, Jeroen Dijsselbloem, who is now the front-runner to succeed Jean-Claude Juncker as president of the Eurogroup.

Covering the euro-zone crisis is often surreal. But seldom as much as when you hear a senior official liken banking supervision to love. But let’s take things from the start.

Much of the debate behind closed doors in Brussels and Frankfurt these days is about the single banking supervisor — an agency of/under the European Central Bank that will police the currency bloc’s banks. The details of this first step towards a banking union are being negotiated right now, but one thing that makes it interesting is that its creation and effective operation is a prerequisite for the euro-zone bailout fund to rescue banks directly.

The key word here is “effective.” It’s not enough for this new institution to be designed, legislated, set up. It needs, euro-zone leaders agreed back in June, to be effective. That’s so the bailout fund–the European Stability Mechanism–can trust that the banks it’s saving don’t blow up in its face or on its balance sheet. Read More »

About Real Time Brussels

The Wall Street Journal’s Brussels blog is produced by the Brussels bureau of The Wall Street Journal and Dow Jones Newswires. The bureau has been headed since 2009 by Stephen Fidler, who was previously a correspondent and editor for the Financial Times and Reuters. Also posting regularly: Matthew Dalton, Viktoria Dendrinou, Tom Fairless, Naftali Bendavid, Laurence Norman, Gabriele Steinhauser and Valentina Pop.